If Jensen is shaken, the company will be shaken too... Nvidia CEO risks without a successor

As Jensen Huang, the founder and CEO of NVIDIA, the world's No. 1 artificial intelligence (AI) semiconductor company, faced the biggest negative news of an affair scandal and board investigation on the 8th (local time), NVIDIA, which had no succession structure in place, also faced an unprecedented crisis.

Bloomberg News analyzed that this incident revealed the risk that the lack of a formal succession program could lead to a sudden absence of leadership in a company governance structure that was overly focused on CEO Hwang.

NVIDIA currently does not have an official CEO succession plan disclosed to shareholders or outsiders.

CEO Hwang has repeatedly expressed his desire to run the company for decades more, and the internal reporting system is not a traditional hierarchical structure, but rather has about 60 executives reporting directly to the CEO, with CEO Hwang monopolizing decision-making.

“Nvidia is not an ordinary company, and Jensen is not an ordinary CEO,” said Stacey Rasgone, senior analyst at investment bank Bernstein.

Ultimately, if CEO Hwang's morality and leadership are questioned, the entire company is exposed to the so-called 'key man risk' that could lead to drift.

The Information, a U.S. information technology (IT) media outlet, recently reported that NVIDIA, unlike other Silicon Valley technology industries, has been evaluated as transitioning to a family management system.

In fact, CEO Hwang's daughter Madison Hwang was promoted to senior director of physical AI and robotics product marketing, and his son Spencer Hwang (36) is also serving as director of robotics product management.

In addition, as Vice President Nico Caprez, an alumnus of the London Business School who met Madison Hwang and married him last September, has been rapidly promoted and emerged as one of his closest aides, there is also speculation within the company that "CEO Hwang seems to be preparing Madison and Nico for the next step."

However, as controversy over CEO Hwang arises in a situation where the family succession structure has not yet been actually established, there is a question mark over whether this plan will proceed properly.

Although the board of directors has launched its own investigation, it appears that it will be difficult for the company to resolve the issue on its own, as it is not a simple case of adultery but suspicions of spying from Chinese intelligence agencies have been raised.

The Board of Directors expressed trust in CEO Hwang, saying, "There is no basis for leaking national security or company secrets," and CEO Hwang himself said, "We will restore trust," but his position is expected to be further narrowed as he has already been requested to appear by three U.S. House of Representatives committees and an investigation has been announced in the Senate.

However, President Donald Trump still defended CEO Hwang, calling him a “great person.”

In addition, if CEO Hwang divorces in the aftermath of an affair, another risk may arise, such as an astronomical division of assets.

Forbes estimates that CEO Hwang's net worth is $154 billion (approximately 210 trillion won), and if a divorce suit is filed, he may have to pay more than 100 trillion won in assets to his wife under California's community property system.